Govt. paying taxes for Exxon

Jun 12, 2025 Editorial, News

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Kaieteur News – At a time when Guyana continues to take loans to fund its development, the disclosure that this country paid over $260B in taxes for ExxonMobil in 2024 must be a source of great concern to all citizens.

It must be noted that while this country was throwing away money by paying the taxes of one of the wealthiest companies of the world, in 2024 it spent a total of US$196M to service the country’s ballooning debt, of which US$80M went towards interest. It is also important to note that by the end of 2024, the government had racked up the country’s total debt to almost US$6B, after closing 2023 with a total public debt of US$4.5B.

This weird and unjust situation is, however, underpinned by law. Article 15.4 of the Petroleum Agreement states that the sum equivalent to the taxes owed by the company will be paid by the minister responsible for petroleum to the Commissioner General of the GRA. The contract also allows for the issuing of a receipt to ExxonMobil, indicating that it has met the local tax requirements to avoid the burden of double taxation. Article 15.5 of the contract states, “Within one hundred and eighty (180) days following the end of each year of assessment, the minister shall furnish to contractor proper tax certificates in contractor’s name from the Commissioner General, Guyana Revenue Authority evidencing the payment of the contractor’s income tax under the Income Tax Act and corporation tax under the Corporation Tax Act. Such certificates shall state the amount of tax paid individually on behalf of contractor or parties comprising the contractor and other particulars customary for such certificates.”

It is this said contract, with such a provision, that the President Irfaan Ali’s administration is refusing to renegotiate, arguing sanctity of contract and even saying that the oil giant will not come to the table. As we reported in our Wednesday edition, ExxonMobil Guyana Limited (EMGL) is the operator of the Stabroek Block with a 45 per cent interest, while Hess Guyana Exploration Ltd. holds 30 per cent and CNOOC Petroleum Guyana Limited holds 25 per cent. According to Exxon’s 2024 annual report, “Revenue includes non-customer revenue of G$260,155,788,763 (2023 – G$138,182,695,517) related to Article 15.4 of the Petroleum Agreement. The report goes on to state, “Income Tax Expense is recognised in respect of taxable profit calculated on the basis of the income tax laws of Guyana that have been enacted as of the date of these financial statements.”

For 2024, EMGL recorded an operating profit before taxation of $1.255 trillion (US$6 billion). The company reported a tax expense of $260 billion (US$1.2 billion) and a total comprehensive income of $995.1 billion (US$4.7 billion). According to the PSA, the Stabroek Block partners are allowed to recover 75 per cent of the oil produced to recover their investment costs; the remaining 25 per cent is considered profit, which is split between Guyana and the Stabroek Block consortium, giving each 12.5 per cent. However, the consortium pays a 2 per cent royalty from its share to Guyana. From its 14.5 per cent Guyana then has to pay taxes for the oil companies.

This matter of Exxon not paying taxes is one of the fatal flaws of the lopsided oil contract that was signed by the APNUAFC Government back in 2016. Publisher of this newspaper, Dr. Glenn Lall, had unsuccessfully sought to change this situation by approaching the court- a case which saw the Government of Guyana joining ExxonMobil to fight him off. In this matter involving huge tax exemptions granted by the Government of Guyana to Exxon and its partners operating in Guyana’s oilfields, all Lall and thousands of other Guyanese want is for the fullest principles of fairness and what is just and equitable. Guyanese, already burdened by poverty and now struggling with soaring cost of living realities, must get some balance in their relationship with the oil companies spearheaded by Exxon.

The position of both the government and opposition in resisting renegotiation of the contract confirms the fact that patriotism has beaten a hasty retreat before the commercialism, tribalism, opportunism, and vandalism that have all become nothing but central features of our oil wealth. In today’s circumstances, there is no consideration, no space, for the type of oil nationalism that would benefit immensely the citizens of this country. It should be noted that we speak not of oil nationalisation, but of a mentality that is front and center about the kind of oil nationalism that embraces a place for foreigners and locals, and each with their fair and square share of Guyana’s oil bonanza. It must cease being this one-sided, feet upward, face downward deal that condemns this nation to a destiny of continued chronic poverty for the many. We cannot continue to be satisfied with being among the richest people on earth on paper. We must not become complacent and be misled about potentially having the highest GDP in the world, according to projections of experts. We have to put a stop to paying our fair share of taxes, while Exxon and its partners are the beneficiaries of massive tax exemptions that burden us still further.

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• Editorial, Exxon Taxes, GRA, Guyana Oil, Guyana Taxes

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